Adekunle Sonola

CEO's Profile

Theme |
Topic | Risk Aspects that Influence the Cost of Credit
MONTH | September 2014

Discussion Focus Area:

  • Industry View on Country Risks
  • How Banks Price Customer- and Company Risk
  • Credit Information Sharing in Kenya & Other Markets

Overview:

Through Kenya Bankers Association in partnership with Central Bank of Kenya, the industry has taken up several initiatives to address the risks that contribute to higher costs of banking; the Credit Information Sharing Initiative is one key area that is enabling banks to better price their loan products – based on the individual customer’s risk profile. This initiative also minimizes the reliance on traditional collateral, which is a challenge for most.

With the introduction of Credit Information Sharing, a mechanism through which banks share customer data and licensed Credit Reference Bureaus can generate a credit report based on that data, the industry has been able to enhance its credit risk assessment process.

The two licensed Credit Reference Bureaus (Metropol and TransUnion) are also developing various products for banks which target various segments of the market that present good credit opportunities.